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Six in Ten Startups Struggle to Recruit Due to Skills Gaps

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Six in ten (60%) UK startups are struggling to find talent in their required area, pointing to the presence of skills gaps across the nation.

New data from conference calling company PowWowNow, looking into the barriers to recruitment in SMEs across Europe, reveals the industries facing the biggest skills gaps are HR and travel.

Over two thirds (67%) of UK SMEs in the travel and transport industry struggle to attract new workers due to a lack of talent in the subject area that needs filling; while 60 percent of HR businesses encounter the same problem. Industries for whom this is less of an issue include retail (21%) and arts and culture (a third).

For larger SMEs, the biggest barrier to recruitment is strong competition in the wider industry (42%), with only a quarter of startups seeing this as a problem when looking to hire.

Across Europe, German SMEs struggle the most with a lack of talent, with three quarters (75%) encountering this as a major problem when seeking new workers.

The data also reveals larger SMEs are eschewing recruitment to focus on upskilling, perhaps to tackle a perceived lack of talent; 30% are looking for funding to help their workers gain new skills. Contrastingly, just 11% of startups want funding for upskilling but half are raising funds for the hiring of new staff. This compares to only a third (32%) of bigger SMEs.

When attracting talent, well over half (57%) of UK SMEs revealed they lost out on hiring due to a lack of flexible working options available for staff. In France, this was even more of a problem, with 60 percent of SMEs finding a dearth of modern working practices was discouraging new hires. Meanwhile, German workers appear to prioritise flexible working less; only 42 percent of SMEs found a lack of these options had cost them recruits.

Jason Downes, MD at PowWowNow, commented on the findings,

“The fact that so many SMEs are struggling to find the talent they need spells trouble for UK economic growth and points to the existence of numerous skills gaps across the UK.

“Added to this, in an already competitive hiring environment, many companies are losing out simply by not providing more flexible options for staff at work. With employees increasingly looking for a better work-life balance and the chance to marry work and family commitments more harmoniously, it’s clear businesses must adapt and offer modern working practices if they are to attract the talent they need to thrive.”